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DWP letters about underpaid ESA

A look at the DWP review currently underway to check for historic underpayments of ESA and why you may be wondering about a mysterious letter from the DWP

Hello.

I hope this latest Benefits Blog finds you in good sorts, this blustery back to normal Spring cool Monday morning. The recycling bags are out here and threatening to take off into the most ancient hills beyond this west wales street.

This blog is inspired by a question from a Centre member, the answer to which may be of interest to many more of you. So I have generalised and expanded tat individual answer to make a general blog out of it :-)

So, without giving anything away from our private chat, the peace of said Centre member - as for many others perhaps - has been troubled by the arrival of letters out of the blue from Employment and Support Allowance (ESA) to book a telephone chat.

For her - and many others - benefits seemed long settled, so understandably the appearance of such post is worrying. Like most of people living with cancer's ups and downs, she could do without concerns over ESA running out or being re-assessed.

Is such a letter an ominous portent, like strange doings in the sky, cows jumping sideways or the readings to be had from entrails of goats or slaughtered aubergines ?

But . fear not :-) In this case at least, this letter - and similar ones flying out across the land - need not cause worries about anything nasty in the proverbial woodshed. Which is more than can be said for my increasingly direputable and rather loosely connected rusting zinc srtructure out back :-)

These DWP letters will either mean no change or good news and some extra money:-)

It's along the lines of a "Have you been financially injured in a DWP accident that was not your fault?" review exercise, that the Courts are forcing the DWP to undertake.

1. Whats the issue?

The issue relates to the DWP forgetting to fully check on people's entitlement when they moved over from the "old" system of Incapacity Benefit (IB) and Income Support (IS) - (for sickness) to the then new-fangled ESA. This was mostly done between 2011 and 2014, although there are still some 100,000 awaiting the switch.

The DWP realised the systemic problem back in 2013. Until then people who switched over - and new claims for ESA - may not have been fully checked. Things should have got better since, but it is always worth double-checking your entitlement regardless of when you started claiming ESA.

Some 330,000 people now need to be re-checked by the DWP out of which they expect to find some 80,000 people will have lost out, before acts were got together ; in some cases by several thousand pounds.

2. The two sorts of ESA and how they relate

ESA comes in two flavours with:

- Contributory ESA equating roughly to the old non-means tested Incapacity Benefit (IB) paid to you as an individual based on your National Insurance (NI) contributions, regardless of most other income or what your partner is up to - financially speaking :-) - ; and

- Income-related ESA which largely replaced the then entirely separate Income Support (IS) - for sickness. IS continues for e.g carers and some lone parents. Both the old and new of this "means tested" kind are affected other income and savings that you - and any partner - may have.

At the time, the DWP forgot to double-check as to whether people going over from IB to Contributory ESA might also have qualified for a top up from Income-related ESA. They largely have done since 2013, but now the Courts are forcing them to go back further and check.

Now, sometimes it is an either/or between the two sorts of ESA, but other times you can get both . And that's essentially where the DWP went wrong on this occasion

2.1 When it is one or t'other

Sometimes, then Income-related ESA is purely there as a back up alternative to those who can't get Contributory ESA. That might happen e.g.

- because some people don't have the right National Insurance (NI) record to get Contributory ESA; or

- or because entitlement to Contributory ESA has timed out. This only affects those in the "work related activity group" of ESA after a year, and not the majority of people affected by cancer who may be in the Support group.

So for many then, Income-related ESA might come into play instead of Contributory ESA

The basic amounts within each type of ESA are identical, so what then is the advantage of having paid all that NI over the years?

Sometimes people living on their own, with not much other income, are no better off for all those NI contributions . They get no more than those whose circumstances meant that they weren't able / liable to pay NI in those past years.

However, if you have a partner working, a fair amount of savings or some other income, then you do feel the benefit of all those contributions: you can still get your non-means tested Contributory ESA regardless of all the money under the mattress or having married well :-)

If you only had Income-related ESA to fall back on in those circumstances, then you might not get anything, as the extra financial assessment - covering both you and any partner - might wipe out any entitlement you might have otherwise had. But you can carry on getting Contributory ESA as of right - as part of your national insurance policy - regardless of most other income.

2.2 But sometimes you can get both

Some people get their Contributory ESA from past NI contributions, but as it happens don't have much other income or savings nor have they married well and have a thousand acres :-) . They may rely mainly on their ESA and perhaps other benefits (such as PIP, or Housing Benefit) to get by.

In those circumstances, Income-related ESA can also act as a top-up to their Contributory ESA.

That's because Income-related ESA has some additional amounts - or "premiums" - that Contributory ESA doesn't.

Now that could apply under the old system too. Many people didn't realise that extra premiums such as the various disability and carers premiums nor extra amounts for a partner without income or mortgage interest might have between entitled them to a top up from Income Support.

Back in the day though, Income Support and Incapacity Benefit were two entirely separate benefits, so it was always up to you to make a separate claim or check this out. If you didn't - and so lost out - the DWP -as a body - would simply shrug their shoulders: you can't make people claim and they have no duty to check for other benefits.

In practise, in those days of far more human contact and wider staff knowledge, many kindly and experiened DWP staff might well do just that if they came across a customer who was apparently under claiming; going that extra mile, more from a personal duty of care, rather than a departmental one.

Interestingly, the new Social Security Agency that will run devolved benefits in Scotland has just such a general duty to advise as part of a a wider agenda of "dignity, fairness and responsibility". It will be interesting to see if people notice a general difference in dealings with the new agency and in the DWP north of the border

3. So what changed under ESA?

There were several changes that made the potential for top ups increase more common and made things more directly the DWP's responsibility, under ESA:

- the two previously entirely separate benefits became one - for people too unwell to work - so the DWP needed to consider entitlement to both as people switched over to do their core job of processing claims made , properly..

- ESA had a new concept of dividing the unwell into two groups: the Support Group and the Work Related Activity Group.

- the previous "enhanced disability premium" (EDP) widened in scope. Under other benefits like Income Support and JSA . this premium only applies to people who receive the highest rate of DLA Care / enhanced rate PIP Daily Living. But under ESA, the premium also extends to all those in the ESA Support Group. It's worth an extra £16.40 a week in the sums at current rates - or £22 if you are one of a couple.

So that means that quite a few more people could be entitled to a weekly top up to their Contributory ESA from Income-related ESA than might have been the case under the old system.

And because under ESA it is all part of the same benefit, the DWP did - and does - now have a duty to check this, in order to process the whole ESA claim correctly. Shoulder shrugging at people not knowing to claim a totally separate benefit was -and is - no longer an option :-)

There are other premiums too, that people can miss out on, such as the far more valuable "severe disability premium" (SDP) .

Just as a by the way, as it may be relevant to many people affected by cancer, that SDP applies to people who -

- get DLA middle or highest rate or PIP Daily Living; and

- who are counted as living alone; and

- for whom no-one is actually receiving Carer's Allowance for helping them .

However, the focus of this review exercise is on the systemic failure to consider the enhanced disability premium (EDP), so it will be interesting to see if DWP will ask anything around any other premiums while they are at it.

Please do share your experience : message me or post in the Conversationhere.

If you have missed out on other premiums, there is other action we can take to sort that out.

In general, if in doubt as to whether you might be getting all the ESA that is due to you, please message me and we can double check, in complete confidence.

4. The current review exercise

So these letters relate to a telephone check by the DWP particularly focussed on the missing EDP, that has affected many people under ESA.

Now, those with other income, a partner working or savings etc at the time, won't have missed out from the lack of that top up. Yes, they might have been nominally entitled to have an EDP included in any sums, but any amount actually due might well have been wiped out in the overall sums .

The problem was that the DWP - used to a past world of two totally different benefits - was routinely failing to even do these sums, or at least check if they needed to.

So quite a few people - around 80,000 - would have gained from the top up had the transfer been done more thoroughly; and so they did miss out.

In order to find who those those people are, the DWP are going to need to check around 330,000 ESA claims. And that is why the letter and follow up calls - that caused some worry to this morning's enquirer - are spreading widely about the place. .

These phone calls are then, not about starting up a new re-assessment process nor replacing existing settled Contributory ESA entitlement with an Income-related ESA one. Yes, such processes can still trouble you at other times as regular features of an ongoing ESA claim.

But in this case, fear not; no new process, possible harm nor hassle will follow :-) . Either:

- there will be no change for you at all ; or

- that you may be owed a small weekly amount going back quite a way; which could amount to a pretty little sum :-).

5. How far back will the DWP pay?

But just how far back? The DWP are going for the most recent out of either:

- the date someone switched over to ESA; or

- the 21st October 2014 which was the date of the legal ruling telling them they had to pay up.

In most cases, people switched over between 2011 and 2014, do the proposed date will be in October 2014.

In trying to limit the financial impact on their budget, the DWP are relying on a bit of law that - some do say - may not actually apply in this case. We advisers are a bolshie lot and not inclined to let the DWP get away with it.

So our colleagues in CPAG - see here - are taking the matter of timings back to the Courts to settle how far the DWP may need to pay people back to.

The general rule - which the DWP are relying on - is that where there is a change in the law, then any arrears that arise are indeed limited to the date when the legal ruling was made by the Courts.

That, for example, is what is happening with another DWP review exercise coming along later this year, regarding unlawful discrimination on mental health grounds in awards of PIP Mobility. See the seperate Benefits Blog on that available here.

However, the argument in this case is that nothing changed in the actual law or the Court's interpretation of it; no changes to the criteria or rules for benefit in this case.

Rather, the Court may have made a ruling, but it was simply to tell the DWP that they had to implement the law as it stood then and stands now; essentially to get on and do the right thing.

If CPAG's argument succeeds, then any underpayments should really be seen as no more than an "official error" by the DWP i.e by failing to operate the law as it applied at that time correctly. And even more so because it's an error that the heads at DWP became aware of back in 2013, but rather - it seems - hoped nobody would notice in terms of the previous failures.

And if it is just simply an official error, then the DWP are bound to make good the error in full i.e all the way back to the date from which someone lost out simply due to the DWP error.

So the Courts will now rule on the contested issue of how far the backpayments need to go.

Meanwhile, the review exercise can carry on regardless - as this issue doesn't get in the way of working out who has been affected. The DWP can carry on with checking out who has been affected while awaiting a Court ruling on how much is actually due to those who have lost out.

So... in summary

There is nothing to be alarmed about in these particular letters. They are not like other routine ones about possible expiry of Contributory ESA nor a prelude to a fresh ESA health re-assessment.

But to cut along story short, these particular telephone checks will either result in no change at all to your ESA or that you may be owed a pretty sum, even if we don't quite yet know how pretty that might be :-)

Whether you get anything from this exercise will depend on your financial circumstances at the time that you switched and since.

Please post your thoughts, comments or general queries by joining the Conversationhere

If this blog is making you think: "I wonder if I am getting all the ESA that I should ?", then please message me and we can check your situation entirely privately. And the same, applies if you want to check on any other benefits too :-)

But in the meantime, please don't let this particular letter and telephone appointment cause you any undue alarm. It is either no change or a nice unexpected windfall - an unexpected bonus even if it's just money the DWP have kindly been saving up for you :-)